A New Service for Collecting Royalties From YouTube

This post co-authored by Policy Intern Cody Duncan

Last week, TuneCore co-founders Jeff Price and Peter Wells announced the launch of Audiam — a new service designed to help artists make money off their music when it’s part of user-uploaded content on YouTube. As you probably are aware, there’s a lot of music on YouTube, and not all of it is licensed from the rightsholder. YouTube already has a system called Content ID in place that allows rightsholders to block or allow a user-uploaded video that contains copyrighted material when it is posted. Owners can choose between 1) refusing the use 2) allowing it and “tracking” views, demographics, referrals and engagement or 3) monetizing the use through revenue-sharing from ads. Major and independent labels as well as publishers have been utilizing Content ID for at least a couple of years; Audiam aims to make the system more accessible to unaffiliated and self-published musicians and songwriters.

Through a partnership with YouTube, Audiam will allow artists to upload tracks to be digitally “fingerprinted” using YouTube’s Content ID tools for automated identification in YouTube videos. When the service recognizes a track, rather than issuing a takedown notice, YouTube will place an advertisement in the user’s video to generate ad revenue and pay for the license. YouTube takes 45 percent of revenue generated for hosting the content and brokering the deals with advertisers, and Audiam takes 25 percent. Notably, Audiam collects royalties for both the composition and the recording, so an artist must control both to make money on a track.

Of course, 25 percent might seem a bit steep for an automated service. But consider that artists pay nothing to sign up, which keeps the initial risk low. There’s also the potential that some artists will fare better with Audiam than without, particularly if the service gets big enough to gain greater bargaining power with YouTube. (Keep in mind that YouTube already offers direct partnerships with content creators — including musicians — who upload material to which they own all the rights. Audiam provides an artist with the ability to make money from third-party uploads containing their music.)

When Jeff Price announced Audiam via a post at Digital Music News, many in the comments section were quick to suggest that this type of service was not in fact new. Some pointed to CDBaby’s platform, which operates in partnership with Rumblefish. While it’s true that there are other services that provide similar monetization opportunities, pricing and royalty splits differ. For example, CDBaby charges upfront, and, Rumblefish takes 50 percent of the artist’s royalties generated from YouTube ads. Then there’s Topspin, which recently announced a partnership with YouTube that allows artists to sell other items within the YouTube ecosystem. There are certainly a lot of choices, and there is likely no one-size fits all approach. Some artists might want greater integration within services, others might prefer separation. Some may prefer up-front payments, others will be cool with sharing royalties (or both). And some may not find these platforms particularly useful, preferring to sell physical goods at shows or even in — gasp! — record stores.

Major labels have had revenue-sharing arrangements like those offered by Audiam for some time, and the new company acknowledges in its FAQs section, independent artists can actually set up something like this for themselves. However, doing so requires a direct licensing deal with YouTube, which may require a bit more legwork. However, if you use Audiam, and later want to go direct, you have the option, albeit after a set period of time. When signing up, musicians give exclusive right to license their music on YouTube to Audiam for a twelve-month term, which renews automatically following notices of pending expiration. At that point you can choose to go it alone, or even pretend that there is no such thing as YouTube while you wait for MTV to play a video.

There are notable limitations to Audiam, however. As previously mentioned, artists must control both the rights to the master recording, and the composition. So that means no money for covers (at least not at the moment). Second, if an artist has her own channel featuring her own music, things get somewhat more complicated for algorithmic reasons that make our heads explode. (Basically, you could sign up for Audiam and flag your music for third-party monetization, but when you do, it’s in the YouTube Content ID system as being licensed by Audiam, meaning, the company may end up taking a cut of revenue generated from your own channel.) Third, as for right now, Audiam is available everywhere except the United States.

Still, we’re inclined to see the release as a positive development. It’s pretty obvious that there are real difficulties in enforcing copyright on massively-scaled platforms, but these platforms also bring opportunity for exposure and compensation. Then there are complications arising from the two copyrights in music, which can play out in all kinds of ways across platforms and territories. And we’re always talking about what leverage artists have (or don’t have) on various platforms. All of these reasons are why we are supportive of services that can work for musicians. As the digital market grows, we’ll need more artist-focused solutions. Not all of them will thrive (and not all of them deserve to). But the ones that offer value to artists should have the opportunity to succeed or fail based on that value.

Comments

This is excellent for a musician and I think it's terrific that companies are creating tools such as this. However I'd like to know where the content creator of the video gets a slice of the pie in terms of revenue share. For example, a two hour film may use one minute of commercial music. Is it fair for the copyright owner to earn exclusively revenue from that video when the majority of the work does not feature their copyrighted material. I feel there needs to be an improvement in this area like a tool that mathematically works out where to place ads and offer all parties a fair deal. The musician, content creator and advertiser want the benefits. I feel at the moment that the content creator suffers the most. Ideally content on Youtube can be properly licensed but we're talking about thousands of pounds to license a video which may only receive a few thousand views, it seems out of proportion and I feel the technology used by Youtube such as it's copyright ID system is a little dated even though it's only a few years old.